I have a question for you. What is the most basic principle of insurance? Overinsurance. Some pay more than what they use so others can pay less. But what happens when “more” becomes too much, too often? What happens when an employer gets tired of continually subsidizing an insurance pool it consistently outperforms? What is a chronically overinsured employer to do? Continue reading Captives: Cutting Chronic Costs Through Cohesion
We’re not quite in a hypercompetitive market, but we are definitely experiencing severe turbulence while effective underwriting and claims analysis is replaced by illogical market forces. The current pricing strategy employed by new entrants and Hartford mainstays, has introduced irrationality into an otherwise sophisticated underwriting approach. Our valued partners aren’t solely responsible. Compliance with the Affordable Care Act, complex funding strategies, and increased service level expectations, has led to consolidation in the broker distribution channel as well. This consolidation has left collateral damage, with some employing desperate tactics in an attempt to hang on. Here are the perspectives of three stakeholders: Continue reading Insurance Market Turbulence
Having just completed my seventh year at Ovation, I took some time to reflect on how the insurance industry has evolved. The challenges and complexities in employee benefits continue to grow. While the Affordable Care Act (ACA) has created a lot of confusion and unrest, it has also provided an excellent opportunity for growth and reinvestment in our client relationships. I started this job seven years ago thinking I was in “sales,” and quickly learned that my job was not really about “selling” anything whatsoever. After spending time with some of my colleagues and our clients, I quickly learned that a broker relationship is one of the most important and carefully scrutinized relationships an employer will evaluate on a regular basis. I learned that focusing on rapport, trust, and proactive guidance outweighs talking about the newest product or worrying about where the next new client is coming from. Continue reading Sales and Relationship Building in Today’s Marketplace
I’m fascinated by my current read, The Zero Marginal Cost Society, by Jeremy Rifkin. I may not witness the complete evolution of our dependence on fossil fuels to free forms energy—wind, solar and water (by 2050 Rifkin predicts); but I can see how The Internet of Things, The Collaborative Commons, and The Eclipse of Capitalism is rapidly revealing that companies refusing to step back and see the forest through the trees are becoming irrelevant at an unnerving pace.
Many goods and services that have historically carried significant, marginal cost are now free. Rifkin gives many examples is his latest book; on-line universities, e-books, photos, music, renewable energy, and 3D printing. All carry zero marginal cost—that is—it costs almost nothing to add one more student, publish another e-book, print another prosthesis, etc. Companies refusing to recognize this dynamic and evolve are destined for failure. I’d place traditional colleges and text book publishers as two potential candidates for irrelevancy or certainly niche status. Rifkin talks about this but he should credit me on these, I’ve been talking about both of these longer than he has. Continue reading Employee Benefits Brokers Must Evolve in the Face of Marginalization